“You said,” Geoff Rochwarger, our second most senior manager, replied, “I could probably get rid of twenty-five percent of the expense just by cutting the deadweight if I had a free hand.”

“Well, you’ve got it now, but I want you to cut the bad debt out of the carrier business as well.”

“Are you sure?” he asked. “This is our quickest-growing business. If we cut service to any client we thought was risky, I don’t know what would happen.”

“We’re not going to cut service,” I replied. “We’ll just make them pay up front.”

“But no one demands up-front payment. They’ll all quit.”

“Look,” I said, “if they quit, they quit. Bad debt’s wiping all our profit out anyway. Even if only half stay, we’ll be making hundreds of thousands more a month than now. And with the low price we’ll be able to charge, maybe they won’t quit. Maybe more will sign up.”

“Here, here,” Steve Brown, our chief financial officer, called out approvingly. “If this plan includes getting rid of the bad debt, you can count me in.”

“And Net2Phone?” our controller asked. “I guess we leave that alone.” He was referring to our ace-in-the-hole development project.

“Nothing’s sacrosanct,” I said with a wild look in my eye. “Everything has to make a profit. Forget about the market. Let’s cut the fat out of Net2Phone first. Second, let’s stop putting so much effort into pushing our phone-to-phone product to market. That’s at least six months away. Everyone’s working on it. Instead, let’s really push our product for making real phone calls from computers on the Net. That’s a real niche market we can dominate, and right now we have it all to ourselves. If we make a real profit there, and really perfect the service, we’ll be the ones everybody goes to when they’re ready to do it with just a phone instead of a computer.”

By now Howie was into it and began to take over the meeting. As the various managers and financial people called out their estimates, he began to outline on the whiteboard the specific cuts and budget targets we had to achieve; and the timetable. It was a big job. Within three months, by the end of the quarter, we needed to achieve 20 percent growth and cut costs by 30 percent. Then we’d become profitable again. It was a big job, but these guys couldn’t wait to get started.

The firings were scheduled for Monday. Word leaked out early, though, and everyone froze and went into a panic when they heard what was going to happen. Everyone. Both great employees and poor ones were worried that they’d soon be gone. The Internet division was in a particular panic. We were left with no choice but to move things up and do the whole job on Friday.